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Adjusting to value propositions: The DPS effect

When Pedro Mas heard a government official describe Canada’s next fixed-wing search and rescue aircraft as a “no fail” platform, it was music to his ears.

“We feel very comfortable because it is…our strongest point,” said the head of Airbus Defence and Space in Canada of the C295, a proven aircraft already performing SAR missions in Portugal, Finland, Chile and with the U.S. Coast Guard.

The government has indicated it will be seeking a SAR solution rather than just an aircraft or mission system, and will ask industry to propose the size and number of aircraft, as well as basing options, to deliver that solution.

That, too, plays to Airbus’s strengths, Mas believes, thanks to its Canadian partners, which include Pratt & Whitney Canada (engine), CAE (simulation and training) and Vector Aerospace (engine maintenance).

The company recently signed an MOU with Provincial Aerospace (PAL) to provide in-service support should its bid be successful. Equally important, though, is PAL’s depth of experience with SAR mission systems. “They are providing services to the Canadian government tracking icebergs, search and rescue, fisheries control, and many other things,” Mas said. “As far as we know, they are the first company in Canada with such experience.”

Although there have been many false starts to the FWSAR program, an RFP is expected before the end of 2014, followed by a contract award in 2015. More importantly, FWSAR could be the first major procurement program to be competed under the government’s new Defence Procurement Strategy (DPS) and Mas says it is already having an impact.

“One year ago we had a nice view of the IRBs and the Canadian content requirement. And now it has changed. Now we are receiving documents called High Value Work, which are part of the value proposition.”

Though he is pleased with the process and the level of engagement with government and National Defence, the shift from Industrial and Regional Benefits to technological benefits has affected how Airbus thinks about Canadian content. “We know that the value proposition for high value work is going to have important weight in the final decision,” he said. “That means we are paying a lot of attention to this point.”

Airbus has accumulated a healthy IRB bank account with Industry Canada through previous contracts involving Airbus Commercial and Military and Eurocopter, which it hopes to leverage with FWSAR. Nonetheless, the DPS means that Mas is still actively looking for technology partners.

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